Is Amazon Prime worth it?

A look at how seven of the best Prime benefits add up

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Heading into the holidays, you may be filling a sack (or shopping cart – in store or
online) with a heap of holiday gifts for friends and loved ones.

Is Amazon Prime, with Cyber Monday deals, free shipping and much
more, worth $99 to help you save on all of that spending?

We crunched the numbers for seven Amazon Prime perks to help
you figure out if the benefits outweigh the $99 fee.

1. Free shipping
benefits (Estimated value = $300/year)

One of the primary appeals of Amazon Prime is its free
shipping guarantee. Prime members get free two-day shipping, as well as free
same-day delivery in certain cities and even same-hour delivery in certain ZIP
codes.

Amazon Prime free shipping (Qualified items only)

Shipping

Cost

Two-day shipping

Free

Same-day delivery

Free in certain cities

Two-hour delivery

Free in eligible ZIP codes

One-day shipping

Free in certain cities

Saturday shipping

Price varies by item size and weight – as low as $7.99 per item

No-rush shipping

Free

Standard shipping (4-5 business days)

Free

Release-date delivery

Free

If your dream is to have endless orders from Amazon
delivered posthaste to your doorstep without racking up shipping fees, this is
an excellent deal. Your savings on two-day deliveries should easily surpass a
$99 membership fee.

This is a difficult benefit to value, since shipping fees
can vary drastically, depending on the price and type of item. We’ve estimated
an average of $15 per $50 item for two-day shipping fees. At a rate of two deliveries per month, that comes to $300 per year.

Drawbacks: Amazon already offers free standard shipping on orders
over $25 to every Amazon member. If you typically order more than $25 worth of
merchandise and aren’t in the habit of using expedited shipping, Prime shipping
benefits may be more of a convenience than a cost saver for you.

We’d also note that, to compete
with Amazon, Walmart recently introduced free two-day shipping on orders
greater than $25. If you’re purely interested in the bottom line, Walmart may
be the better place to shop – you can get expedited shipping on low-priced
merchandise without having to pay a $99 membership fee.

With the Amazon Prime Rewards Visa Signature card, you get a
5 percent discount on every purchase that you make on Amazon. As more Whole
Foods Market items are added on Amazon, you may score a deal on your
Thanksgiving turkey, dressing and cranberries delivered to your door just in
time for the big dinner.

Because this 5 percent discount is available year-round, it
beats the rewards rate for Amazon purchases on any other rewards card. (Discover’s
5 percent cash back on Amazon purchases is only available during the fourth
quarter, and though Discover matches first-year cash back, that likely wouldn’t
trump 5 percent on Amazon purchases all year long.)

For an Amazon Prime
member who spends around $1,300 a year, 5 percent cash back adds up to $65 per
year.

Amazon Prime Visa Signature

CARD DETAILS

Rewards rate

5% cash back on Amazon.com purchases

2% cash back on gas, restaurant and drugstore purchases

1% cash back on other purchases

Sign-up bonus

$70 Amazon.com gift card

Why get it?

You are already a Prime member, you are thinking of joining Prime, or you spend $5,000+ on Amazon purchases or $99+ on Amazon shipping per year (in which case, Prime membership is definitely worth it).

Drawbacks: While you can rack up a significant discount on your
purchases just by using the card – enough to offset your annual
membership fee – you should keep in mind that Amazon also offers the Amazon
Rewards Visa to regular Amazon members. With the regular Rewards Visa, you can
earn 3 percent cash back without having to pay a membership fee.

Amazon Prime offers some great benefits for Amazon Family members, and one
of the more popular ones is its 20 percent discount on diapers. To get the
discount, you must start a diaper subscription through Amazon’s Subscribe
and Save service – Amazon will then deliver the diapers to you on a regular
basis (on intervals between one and six months), and you can cancel at any
time.

Drawbacks: A quick comparison of Amazon’s diaper prices verifies
that the 20 percent discount can get you some of the lowest prices on diapers,
without requiring a lot of footwork. However, the discount isn’t as great as it
seems. Amazon Subscribe and Save is open to any Amazon member, and regular
Amazon members are already entitled to a 15 percent discount as long as they
subscribe to at least five items. So, the
Prime discount is really more like a 5 percent discount. Also, you should be
aware that Amazon prices fluctuate wildly, so you’ll need to keep a close eye
on your subscription.

4. Free movie and TV
show streaming (Estimated value =
$96/year)

Amazon Prime membership entitles you to unlimited access to
thousands of TV and movie titles at no additional cost. Since Hulu and Netflix
charge around $7.99 per month for similar services, we figure that Prime’s free streaming service is worth around $95.88
year, nearly equal to your Prime subscription.

Drawbacks: While Amazon has been working to beef up its content, it
doesn’t offer the same quality or breadth of content as say Netflix. However,
it does have some good titles in its lineup, including original series
“Transparent” and “Catastrophe.” As a free add-on service, it’s a great deal.

5. Free music
streaming (Estimated value = $120/year)

You also get a free membership to Prime music, which grants
you unlimited, ad-free access to hundreds of playlists and more than a million
songs. Since Spotify charges a $9.99 fee per month for its subscription
service, we figure that Prime music
membership nets you $120 in value.

Drawbacks: Like its video content, Amazon’s music content is limited
and not up to par with competitors such as Spotify, so maybe it’s not quite worth $120 per year. Still, as an add-on
service, it’s icing on the cake.

6. Free unlimited
photo storage (Estimated value = $60/year)

One nifty benefit of Prime membership is unlimited storage
for your photos. While most storage services put a tight limit on the number of
files you can store for free and can charge up to $99 per month for a terabyte
of storage, Amazon lets you endlessly add photos to your account for free. Since
Amazon itself charges $59.99 per year for a terabyte of storage, we figure this benefit is worth around $60
per year.

Along with its two-day shipping benefits, Amazon is
currently rolling out several delivery services that – in conjunction with its
recent acquisition of Whole Foods – could be the next big selling proposition
for Prime membership.

Its Prime Pantry service is already available for most ZIP
codes. Prime Pantry allows you to fill a “pantry box” with household items in
smaller, “everyday” sizes and ship them on demand for a flat fee of $5.99. Most
orders arrive within four business days. You can get the delivery fee waived if
you add five “qualifying” items to the box.

Also, Amazon recently launched Prime Now in several major
cities (and will be expanding to other cities soon). Prime Now is a one- to
two-hour delivery service that brings you groceries, as well as restaurant
orders and merchandise, from local shops. Two-hour deliveries are free, while
there is a $7.99 fee for one-hour deliveries.

Essentially – if you live in a qualifying location – you can
get groceries delivered within two hours for free. Considering what other delivery services – including Instacart – charge
for this service, we value it at $150 per year.

Drawbacks: Amazon has a ways to go to compete with the likes of
Instacart. While Prime Pantry does have a pretty good selection of household supplies
and processed food items such as potato chips and coffee, the selection of perishable
items – e.g., produce, meat, milk – that you can get through Prime Now is still
very limited.

For instance, we couldn’t find
lettuce or onions in the selection. (Note, Amazon does have an additional
service – Amazon Fresh – that it is currently testing in certain cities that
does deliver a full of array of grocery items, but this service comes with a
subscription fee of $14.99 per month.)

Other noteworthy Prime
benefits

As mentioned, there’s more to Amazon Prime than can fit in
one article, but here are a few other benefits worth noting:

Unlimited
access to a selection of books, magazines and audio books on any mobile device.
Savings on 12 books/year = $92/year

One free
eBook from the Kindle library each month. Savings on 12 eBooks = $42/year

Prime
Early Access deals. Savings = 20 percent or more on a variety of
merchandise

Amazon
Prime Day. Savings = 20 percent or more on a variety of items

Bonus tip: Save with
a half-price Amazon Prime Student membership

The Amazon Prime for Students program is a really get deal
for students currently in college. You’re entitled to most of the same benefits
as regular Prime members – including free two-day shipping – at a 50 percent
discount. And, you get a 6-month free trial period. All you need is a valid
.edu address to qualify. Benefits include:

Prime video

Prime music (once your six-month trial period
expires)

Free shipping benefits

Free photo storage

Twitch Prime

Exclusive deals for Prime members

Adding it all up: Is
Prime really worth it?

When we add up all the free services that come with Prime
membership, the answer, by an overwhelming number is: Yes … maybe. Actually – it
depends on which of the free services you value and make use of.

In the table below, you can see all our estimated values
added together – the total is more than 10 times the cost of a $99 Prime
membership:

This is a huge value for a $99 fee, and you can see why
Amazon Prime membership is well worth it to many of its members. But, it’s not
worth it for everyone. If you don’t often have a need for two-day shipping and
you prefer Spotify and Netflix over Amazon streaming services, you may have a
harder time seeing the value in Amazon Prime membership.

Also, you should probably factor other costs into the
equation. This
recent statistic from Statista shows that the average Prime member spends
$600 more per year on average ($1,300 total spend per year) than a non-Prime
member on Amazon purchases. There’s a chance that all the conveniences of Amazon
Prime may lure you into spending more on Amazon that you had intended.

The editorial content
below is based solely on the objective assessment of our writers and is not
driven by advertising dollars. However, we do receive compensation when you
click on links to products from our partners. Learn
more about our advertising policy

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